UKHospitality has welcomed the return of inflation to its 2% target, while calling on the Bank of England to cut interest rates.

Responding to yesterday’s (19 June) inflation figures, the trade body commented that reducing the cost burden on hospitality should remain a priority for any incoming government ahead of the July election.

CEO Kate Nicholls said: “Inflation coming down to 2% and hitting the Bank of England’s target is the strongest signal yet for interest rates to be cut.

“It’s clear that the economy is heading in the right direction, which should give confidence to the Bank that now is the time to begin easing the sustained pressure from high interest rates on businesses and consumers.

“We need to remember that costs remain high for hospitality businesses and beginning to reduce the cost burden for the sector needs to be a priority for any incoming government.”

The British Beer and Pub Association (BBPA) added that the cost of doing business remains challenging, calling upon the next government to put an “optimal fiscal and regulatory framework” in place for the sector.

Emma McClarkin, CEO, BBPA, said: “Pubs and brewers will welcome the news today that after a sustained and difficult period of high inflation, the target rate of 2% has been achieved. But with energy costs and food and drink 25% higher than in 2022, the cost of doing business remains challenging. While interest rates are unlikely to be lowered tomorrow during the election period, we now look forward to these easing during the summer and latter stages of the year, and working with the next government to help put in the place the optimal fiscal and regulatory framework that will ensure the beer and pub sector does not just survive but thrives.”

The Night Time Industries Association (NTIA) said businesses and consumers on the ground level remain struggling despite the drop in inflation.

Michael Kill, CEO, NTIA, commented, ‘Hitting the 2% inflation target might seem like a win, but for businesses and consumers on the ground, it’s a different story. This achievement hasn’t yet brought real benefits to those who need it most. While some may celebrate, many in our industry are barely hanging on. The harsh reality is that the struggle continues daily, and we must keep supporting those affected to ensure a true economic recovery that reaches every sector of society.’”